The School Of Cash Flow

Today’s guest spent his ten years investing in small and medium-sized multi-family properties, mixed-use commercial buildings, and mobile home parks. Gabriel Hamel, a Professional Real Estate Investor, shares his overall journey to real estate along with the insights and strategies that helped him amass a multimillion-dollar real estate portfolio consisting of single-family homes, multi-family apartments, and commercial real estate. Instead of being transactional to clients, building relationships allowed him to leverage his business and stay in the game. Many investors dream of having the time freedom he built while having a continuing cash flow. Listen to Gabriel as he shares how he managed it all to live life by design!

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Live Life By Design: Finding Time Freedom In Real Estate With Gabriel Hamel

My guest whom I met initially doing a Spartan Race in Dallas in June 2022. His name is Gabriel Hamel. We’re both in GoBundance together and in 2022, GoBundance started a Spartan Race team. Once I heard GoBundance was forming a Spartan team, I was totally in. I’ve done Spartan races before the Dallas event. I’ve done a Sprint, a few Supers, and even one Beast in Lake Tahoe years back. I knew what to expect and I’m totally into pushing myself with these types of events. Also, what better way to combine fitness, mental toughness, talking about real estate, self-improvement, and networking with other like-minded guys all while doing an obstacle course race?

My next Spartan race with these guys is in October 2022 in SoCal. I’m excited for that. Gabriel is one of the co-captains of the team. He’s in tip-top shape year-round. Here is a little bit more about Gabe as well. He lives in Eugene, Oregon with his wife and two boys. He prioritizes a few things in his life. Stanley being number one, followed by health, happiness, and building wealth through real estate.

In 2005, at 23 years old, after returning home from the Iraq war when the US Army purchased his first single-family property and he purchased another one in 2006 and then another in 2007. He spent from 2009 to 2019 investing in small and medium-sized multifamily properties, mixed-use commercial buildings, and mobile home parks. He holds a $40 million plus real estate portfolio consisting of roughly 400 multifamily, mixed-use, mobile home parks, and commercial units. Without further ado, welcome to the show, Gabe. How are you?

Thanks. That was quite an introduction.

You’re quite the guest. Before we hopped on this call, I made a comment. I know you live in Eugene, Oregon. I know you travel a lot. I was expecting you to be traveling and whatnot to be courting from off-site. It was a surprise to see that you’re at home.

I am at home. I love to travel. When I’m traveling, I like to travel and be present with the family. I like doing stuff like this.

Not even related to real estate, but learning more about you. What’s your travel schedule? How often are you traveling?

I never have to travel. It’s for fun to see places. In 2021, we went to Maui a couple of times, once per month with the family. I went back there for a real estate mastermind meetup, which was awesome. Right before we started, I was telling you that we bought an RV and did a two-month road trip. It was crazy because we had never RV camped. I bought the RV, parked it, and then went to Hawaii for the mastermind. We came back and literally jumped in the RV and took off for two months. We’ve done a lot of cool stuff.

We went to Necker Island, Richard Branson’s island, my wife and I, and some other couples. We got to hang out with Richard. That was pretty amazing. We ended up on some other islands. We’re headed back to the Virgin Islands in March 2023. We did a short two-week road trip to Glacier and Yellowstone and the Tetons. That was amazing. We saw bears up close. We hiked up and jumped into the Glacier water. I brought my paddle board with me and got out there on the water. It was a beautiful part of the country.

That RV experience, one of these days, it’s on my bucket list to do an RV road trip with my own family. The fact that you were gone for two months, was it an entire cross-country road trip, or did you stay in one area of the United States?

We did the eight Western states. We literally didn’t have a plan when we jumped in there. We started to go North. My wife’s family is up there. Our only planned stop was Spokane. We went over to Idaho and started hitting up the hot springs and into Montana. We are like, “Why are we headed up North to the cold? Let’s go South.” In some places, we stayed a night, some 2 or 3 nights, and some a week. We made it up as we went. Sometimes we stayed in nice RV resorts. Other times, we were camping in the middle of the desert with no one around us. It was a mix of everything. It was amazing.

I know you’re into fitness. How did you manage even your fitness routine while you were on the road, out of curiosity?

The timing was pretty amazing. Right before I went, I mentioned going to that real estate mastermind in Maui. I tore my bicep in Maui a day before the mastermind. I have a wrestling background. I was rolling around with some jiu-jitsu guys and tore my bicep completely. I had no pain. I had a full range of motion. I was like, “I’ll take care of this when I get back.” I spent ten days in Maui. I came back with a torn bicep and also COVID. Everyone got COVID pretty much at the mastermind. We’re supposed to leave on this road trip a week later. I go in and was like, “My arm feels fine, but this doesn’t look right.”

Rich Dad Poor Dad

There’s a big gap between where it’s supposed to attach to the elbow. They do the MRI and they’re like, “Your bicep is not attached at all. If you want any muscle at all, you’ll get atrophy if you don’t get it reattached.” I came back, I got it reattached, and we jumped on jumped in the RV about a week later and took off. It forced me to modify my workouts. I never stopped working out. I’m cautious of that arm. I do a lot of bodyweight training stuff, too. You can take that anywhere on the road. I stayed consistent, but, with the bicep tear, it forced me to change things up a little bit.

How does one reattach the bicep? Was it an easy operation type of deal?

It was weird because even when I tore it, it almost felt like my funny bone. I was like, “It doesn’t hurt. I have a full range of motion. I could do pushups.” I can do anything. It just hurt if I tried to lift something or that curling motion. Surgery is the last thing that I consider. I didn’t think it could be torn. I was like, “This is going to go back in place. It’s some weird thing.” I was a little bit surprised because I had full mobility. After the surgery, I had to let it heal. The forearm and where your arm bends, they cut in, pull it back, and reattach it.

How did it even happen? Were you working out too much?

No. I don’t know if you know Brandon Turner and Natalia Yarber. Those guys are super in jiu-jitsu. Imagine a bunch of real estate investors and they bring over their jiu-jitsu coach. I was a high school wrestler and a high school wrestling coach for years. I’ve rolled around with jiu-jitsu guys before, but that’s not my sport and background. A bunch of real estate guys and girls doing some jiu-jitsu, and then they’re like, “Let’s have some live goes.”

Me and Tarell, I don’t know if to you know Tarell, he puts on the Limitless event and some other events. A few of the guys are like, “Kick Tarell’s ass.” I start on my back and I get up. We’re scrapping around. I take him down. It literally felt like I hit my funny bone. I wish I say he did something advanced and cool. He has my wrist. I looked down at my biceps 3 inches higher towards my shoulder. I was like, “What’s going on here?”

At least they’re back in one piece. Going back to real estate, I want to learn more about your real estate journey and how that evolved. What made you even think about getting into real estate investing?

Going back to high school, I never knew what I wanted to do. I was attracted to the business. I didn’t know what that might look like. In my mind as a kid, business was a stuffy suit in a high-rise building. Most of the time, I’m in a t-shirt and sweatpants or a t-shirt and jeans these days. I stayed in high school for the social aspect. Because I wrestled, that was important to me. That’s what kept me in school. I’m not sure I would’ve stayed in otherwise. It was hard for me to sit still in class and pay attention.

I couldn’t relate to it. How does this relate to the real world? It was hard for me to connect the dots of how is what I’m learning in school gets applied to real life. In high school, my senior year, I joined the Army National Guard. It was an Infantry unit. We were doing the one-week-in-a-month thing. I had a buddy that I wrestled with. He’s like, “One week in a month, two weeks in a year, just like the commercial.” I’m like, “We go play in the woods one week in a month.” The likelihood of being deployed, I knew was possible, but it was unlikely. That unit hadn’t been deployed since World War II. Most National Guard units hadn’t, so I’m combining those two things. I joined my senior year. I graduate high school. I’m taking some odd jobs.

I’m doing the one-week-in-a-month thing. Two years later, around 2002, I read Rich Dad Poor Dad. That was the book. Many people read it and it’s not a how-to book and an overly complicated book. It simply puts how to create financial freedom and how the model that most of us are taught is different than those that are creating financial success. It was the first book that I read word for word, cover to cover. It was the first book I’d ever read fully through. It was the first thing I’d ever read that I wanted to read and one to keep learning about. In 2002, I made up my mind. In my head, I was like, “I will be financially free through real estate.”

It made sense. Shortly after that, in 2003, I get deployed to Iraq. I’m in Kuwait and Iraq for a year, but I’m constantly thinking about the lessons in that book and some of the other books I read after. In my mind, I was like, “I’m going to come back and start buying real estate.” I got back in 2004 and I bought my first house in 2005. That was the beginning of my real estate journey. It was getting the mindset first. I had decided first in my mind that this is what I was going to do, and this would be my path to success and building wealth. The rest of it is I had to make up and learn as I went like a lot of us.

It sounds like you found your calling. You read a book and that was the first book you finished from beginning to end. That’s your calling.

I was nineteen years old, too. I got all the way through school without ever reading a book. It was like, “How does this relate to my life?” Even though I didn’t know what my life might look like. I did see a lot of people, like my parents working low-paying jobs. I saw a lot of people that went to work, doing things that they didn’t like. I was like, “This isn’t what I want. There has to be more.” What that looked like, I don’t know. That book gave me words and direction to a piece of my life that was missing and didn’t even realize it.

For example, your family wasn’t a real estate investor. I’m thinking you figured this out all on your own.

They weren’t in the business and definitely not real estate.

Tell me more about that first investment. You came out of the military. That’s when you bought your first home. How did you go about doing it? Did you have even any money to work with? How’d you go about it?

You’re a mortgage broker, right?

Yeah, I mortgage in real estate.

When did you start?

In lending, 2001.

You’ll appreciate this more than most people. I got back in 2004 and I go to a mortgage broker. I don’t have money and I don’t have a job, a down payment, or income coming in. This broker was like, “I can get you a loan.” I was like, “No kidding?” This is back during the subprime. This is 2004 when I started looking but I bought the first house in 2005. It was an 80/20 loan. It was an 80% loan from one lender and a 20% from another. Zero down and it was 100% financed. I’m doing the math. This is before the term house hacking. You’d hear everyone throw around house hacking.

It made good financial sense to rent out two of the bedrooms and live for less. I bought a modest three-bedroom, two bath house. No money down. I rented out two of the bedrooms that I lived in for less than I could anywhere else. I was like, “That was easy.” That’s 2005. I go back to the bank in 2006. I do it again. I go back in 2007 and do it again. I was like, “This is easier than the book says.” My initial plan was I’m going to go buy a house every year. I’m going to go back to the bank and do a no-money-down deal. As long as I can rent the house out for more than what my mortgage is, this is easy. In 20 years, I’ll have 20 houses.

That was my initial plan. 2008 rolls around and I go back to the bank and say, “I want to buy another house.” 2008 is also my first son was born. I had a small nutrition store that I had opened, and then I closed it. It never made any money. When I went back to the bank, they said, “You don’t qualify at all. All guidelines have changed. Have you been in the mortgage industry? You don’t qualify. You don’t have a job. You have no income and you don’t have a down payment.” I’m saying, “Yeah, but I have these three houses. The last year and the year before, not only did you let me buy a house, you let me buy a house with no money down.”

They’re like, “That’ll probably never happen again. Guidelines have changed. You need a down payment. You need income and a job. Why don’t you go find a job and come back in a few years after you got enough for a down payment?” They’re talking 20% and 30% down on investment properties. I’m doing the math. I don’t have a job. I’m qualified for nothing, maybe a minimum wage job. I took a bunch of admin jobs, eventually landing a job in a high school special education class, working 30 hours a week.

It was barely above minimum wage. This isn’t what I want to do forever. I remember briefly reading about private money, hard money, and seller financing. I knew nobody with money. I didn’t feel comfortable or didn’t feel like I had the experience yet to borrow hard money. I was figuring it out. I thought seller financing would be my path. From 2008 for about a year, every night, I would look on Craigslist for seller financing deals. I’m literally typing the words, owner financing and seller financing. It took about a year and I did my first seller-financed deal in 2009. It was two duplexes side by side. It was four units and a no-money-down seller-financed deal.

My only criterion back then is it had the cashflow. That cashflowed almost to the dollar that I was making at my low-paying job. I finished out that year. I stopped working in 2009. From 2009 to 2013, I did all no-money-down seller-financed deals. I got addicted to the no-money-down seller-financed deals. It was high leverage, but I had nothing to lose. My criteria were it had to be cashflow positive. I wasn’t buying properties to the bank and on the appreciation, or what could I sell this for. I bought everything with the attention to hold onto it forever. I have sold some properties through the years, but that was my criteria, cashflow positive.

I have nothing to lose. The worst-case scenario is I give the property back if I had a default, which I never did. I kept picking up single-family, small multifamily, and small apartments from 2009 through 2013, all no money down seller financed. That’s how I initially built up my portfolio. I have never traditionally financed a property since, other than maybe those three subprimes if you can consider that traditional, but even that wasn’t so traditional.

Real Estate: What kind of terms would you be interested in?

Regarding the seller financing deals right now, are they still seller-financed, or did you switch them over to conventional loans?

In 2014, I picked up several of these properties. By 2014, interest rates were low again. They were in the low fours. Prices are back up. A lot of people were like, “You’re crazy to be buying in 2009, 2010, and 2011. What if prices go down?” I was like, “I don’t care what it looks like on paper, even though those properties have appreciated throughout the years. Some of them are a lot. I don’t care what it’s worth.

As long as my tenants can pay rent, I can pay my mortgage.” In 2014, interest rates dropped and prices were up. I had better tenants paying more rent. I refinanced all those properties in the long-term fixed debt. All the single-family and duplex were at 4.125. My 3 to 6 were all 4.25. By 2014, I realized all these properties are now financed with long-term fixed debt that I wouldn’t have been able to qualify for before.

They all appraise out 70% LTV or better. I’m like, “I have this built-in equity that came from nowhere. It didn’t come from a down payment. I didn’t even have the ability to do it. Had I even had the ability to put 30% down on everyone, it would’ve been so much money out of pocket, which I didn’t have.” In 2014, I’m in the exact same position with the exact loans that I would’ve had to put 30% down on every single one of these four. I was like, “This makes more sense to me. I used that strategy and obviously other strategies throughout the years to complement seller financing.” We’re coming into a market where we’re going to see a lot more seller financing as well.

You talked about a lot of stuff that I want to see and even go back and unpack some of it. You are talking about buying using 80/20 back in the early 2000s. It gives me flashbacks to how I started the business in my twenties. It was fun and exciting being in that mortgage industry pre-mortgage crisis days. It was that easy on the origination side. One of the lenders that I worked for at one point in time before the credit crash was countrywide. They had a mortgage product called Fast and Easy. You state your income and your assets. All they do is do verbal verification of employment and you’re good to go.

It was that easy and it was fast. Even myself, the first property that I bought was not a rental, but the one that I purchased myself was zero down. That first property, I was able to leverage to be able to buy other stuff. I do appreciate your story because everything should have hit the fan when the mortgage crisis happened and nobody could qualify for anything. I’m curious, the properties that you initially bought before the mortgage credit cash, were you still able to keep them?

Most people were doing interest-only types of loans back then that were also adjustable rates, which is totally different from now where everybody’s mostly getting a 30-year fix for the most part. It’s like everybody was caught up getting interest-only 80/20 arms, and then they couldn’t refinance and they were stuck. Were you also stuck with your initial properties during that mortgage credit crash?

I also refinanced those at one point. Those first three properties were also refinanced during that time. Of those initial 3 properties, I’ve sold 2 of those now. One of them I still have as a rental. The ones that I bought in 2005 and 2007, I didn’t sell until 2019.

Even in one of the rental properties I bought before the credit crash happened, I was basing positive cashflow off interest-only payments. That was totally wrong to do. That’s not what you do, but I had to ride things out. At one point, the interest-only period ended, but it became fully amortized. Luckily for me, the rates ended up being variable at the time, but they were low. I had to wait for a point in time where there was enough principle pay down and the equity went up because it was underwater for quite some time. Time in real estate heals all wounds because it ended up balancing out when I was still able to make a profit.

That says a lot, especially with newer investors. It’s easy to look at how you make a quick buck. People look at wholesaling and flipping. There’s nothing wrong with it. It is a way to make money, but making money and building wealth isn’t the same. I was focused less on making money. It had to be cashflow positive. I didn’t want to be backwards in that.

I cared less about what I owed. It was how do I acquire assets that I hold? Even properties that I’ve sold, which aren’t many, it’s only because the appreciation’s there. I’ve held them long enough to then go, “The cashflow is good, but what’s my return on appreciation? Can I take this appreciation and go put this into a profit that’s going to cashflow more and potentially increase the value even more over the long-term?”

I don’t like relying on the upside. In 2012, I went to a real estate event. It was the first real estate event I had gone to. I met a lot of people that got their ass kicked in 2008. The ones that didn’t were focused on cashflow first. Even if on paper, the value went down. It was like, “Did the financial still support themselves?” The fundamentals of investing don’t change. Those that I met that got their ass kicked was speculative.

This property has to go open value. Rents have to go up for this to work. It did for a while until it didn’t. Some of these people, you’re talking tens of millions of dollars. For me, it’s a way that I hedge my risk, is does the property work today when I buy it and into the foreseeable future if I do nothing else if I don’t have to rely on the upside? We’ve had a ton of appreciation and I like that. You can build a lot of wealth through that appreciation. I just don’t like to rely on it.

Even if the property happened to have negative equity and whatnot, provided that it’s still cashflow positive, you could still write it out. The equity will come eventually because you could stand the test of time with the cashflow coming in. That’s cool. Regarding seller financing, I know what it is myself, but a lot of folks might be newer to it. Why would a seller even offer seller financing? Can you explain a little bit more what seller financing is for those that are brand new to even hearing what it is?

I can talk about all these things forever. I love talking about it. Seller financing was out of necessity. The banks told me no. Essentially, what seller financing is rather than someone going and getting a bank loan in Bank of America or Wells Fargo. Instead of getting a bank loan and making your payments to a bank, the seller is financing the property for you. You’re making your payments directly to the seller. There are lots of reasons why a seller might want to carry financing. I didn’t know initially why. I had an idea. What I found through the years is not every seller wants to be cashed out.

If you think of the typical seller, it might be their personal property. They sell the property, go get a mortgage, and buy another house. In fact, every seller ever carried financing for me, their investors themselves. The reason that they want to carry financing is they don’t want to be cashed out because they don’t want to pay the capital gains all at once. They don’t want to be cashed out because they’re at usually an age or a place in their investing cycle where they don’t even want to actively invest into a 1031 exchange.

They don’t want to cash out, be taxed, and then go put that in the stock market. For a seller, one of the biggest advantages is they become the bank essentially on an asset that in a lot of cases, they’ve owned for 20, 30, or 40 years an asset that they’re already comfortable with. There are some nuances to this, but they’re taking a first lien position on the property. If You take the title, you own it like you would if you got a bank mortgage and you’re making your payments directly to them.

For seller financing deals, are sellers being competitive even with the rates that they’re offering for it? Is it, for example, competitive with market conventional rates at the time that you’re buying it, or is it a lot higher?

That’s the question I get asked the most. What are typical seller finance terms? There are no typical terms because, unlike a bank, you go into a bank and they tell you, “Here’s what you need to qualify. Here’s the down payment. Here’s the interest rate.” Until you’re getting into big commercial properties, there’s not a lot of negotiating between you and the bank. The bank tells you, “Here’s what it is. Take it or leave it.” Seller financing comes more down to what is the seller’s needs and what are your needs. Can you create a scenario that gives the seller what they want and also still works for you? For some sellers, it’s the down payment. For some sellers, it’s the interest rate. For some sellers, what is that monthly payment amount?

It’s a dollar amount that they want. There’s a variety of reasons, but the biggest value is it’s usually one of those things. Is it price? Is it a down payment? Is it an interest rate? What’s their sticking point? Can you give them that and then be creative or flexible in the other aspects of the deal to still make the deal work for you? I was fortunate early on that these sellers that I found, I had to find sellers that didn’t care as much about down payment because I didn’t have a down payment. Sometimes it’s not even the price or down payment. An example I share a lot is there was a guy, he had a commercial property and seven multifamily properties. It was listed and they were advertising it as a development project.

A lot of people kept making these cash offers. The listing expired. I knew that strong cash offers came in and he kept rejecting them. I talked to him and said, “What is it about these offers? I know some cash offers came in, why didn’t this sell?” He’s like, “I’m not looking to be cashed out. I have no family to pass this down to. What I want is income for the next fifteen years. There’s this nonprofit organization that’s near and dear to me that if I pass away during those fifteen years, I want those monthly payments to go to that organization.” Nobody knew that because everybody’s making these offers transactionally. No one took the time to know what he wanted. Even his own listing broker marketed this thing as a development project.

They were basing this value on someone buying this for cash, tearing it down in development. That’s not what the guy wanted. He was flexible on price, down payment, and interest rate, but he wanted to make sure that he had income and that if he passed away, this organization would be taken care of for years to come. That short conversation allowed me to create an offer that benefited him, gave him what he wanted, and the deals still worked for me. I’ve never done a seller-financed deal. The other question I asked a lot is like, “What’s your pitch? How do you convince a seller to carry financing?” I have never ever convinced a seller to carry finance. I’ve gotten in front of enough sellers that already want to carry financing.

The only thing I say to them is, “What terms would you be interested in?” That’s all I ask them. I shut up, I listen, and I hear what terms they’d be interested in. By asking that simple question, “What terms would you be interested in,” I hear it’s either priced out payment or interest rate. I take that information and it’s like, “How can I marry those things together? How can I give them what they want and still make the deal work for me?” Sometimes you’re too far off from one another. They want 50% down and a million percent interest and you’re like, “This doesn’t make sense.”

Is it possible to find 100% seller-financed deals even now?

That’s tricky. It’s relationship-based. A couple of years ago, I did a 2% down a seller-financed deal. It was a mobile home park, a strong, and almost 200% cash-on-cash return. This was someone I built a relationship with. I was never trying to buy a mobile home park when I met the guy. He was a developer that I reached out to almost a decade before. I shared this story a lot, too. It’s relationships. I admired his work. He was building a bunch of stuff in town, like these new beautiful apartments. I’m like, “Who is this guy? What’s his story.” I reached out to him. It was years later after I bought my first mobile home park and we’d stayed in touch.

It’s not like we became best friends. We stayed in touch and he said, “My friend is selling a single-family home in the town you might be interested in.” I said, “I’m not buying single-family anymore. I’m focused on the mobile home park.” He’s like, “No kidding, I have a few parks.” I was like, “Would you sell them?” He’s like, “Yeah, there’s one I’m going to sell.” I said, “Would you seller finance?” He said, “Absolutely.” Even him, being a sophisticated investor, his time and energy, his expertise was not in the mobile home park space. He had these mobile home parks.

Real Estate: Allow your mind to think bigger because bigger deals are easier. As you start moving to larger deals, you’re dealing with sellers that are investors themselves.

We already had a relationship. He knew, like, and trusted me. It was simple. It was price, interest rate, down payment, and what’s the most important to you? I remember going and talking with him for 45 minutes. For about 40 minutes, I was talking about life. The other 5 minutes were literally brought out a yellow-lined piece of paper. It was like, “Let’s figure out terms.” It was a handshake and then we had the attorneys write it up. That was the deal. Those deals, they’re still out there. I sold four properties in 2022 with no money down seller financing to someone.

You as a seller giving it to a buyer. You’re paying it forward.

I did that for the first time. It’s still a win-win because I know, like, and trust this couple. They have the skill set to go in there. These were some of the original seller-financed deals that I bought got but I sold them because I have a strong equity position in these properties. They’re older properties. There’s going to be a lot of deferred maintenance over the years. I want to go acquire larger properties. It is not the best use of my money to go put hundreds of thousands of dollars into these properties to maximize the rent, but they have the skillset to go do that. The husband of the couple is physically going in there and rehabbing these properties.

They presented me with a no-money-down offer. It was part funny and I part loved it because they offered me something I was like, “This makes sense. This is what I would’ve offered if I was them.” They said, “We have money, but instead of a down payment, we want to put this money into the property so that we can maximize the rent and increase other properties. We can refi out in a few years and pay you off.” I was happy to do that because these were properties that over the next several years would’ve cost me a lot in deferred maintenance. It’s a win for them. It’s a win for me. We both walk away feeling like we’ve won and are coming out ahead.

That’s a cool feeling. Regarding the seller financing deals, do the sellers need to own the property free and clear in order to offer the buyer seller financing? How does that work?

It doesn’t have to be. It’s a little more complicated if it is. There’s a different structure to it. If the property’s free and clear, it’s a simple note and trustee like a bank would have if you took out a mortgage. A simple note and trustee, they become firstly in position, you’re making your mortgage payment to them. If there’s a loan on the property, you usually have to do it as a land sale contract or a subject to. You’re essentially creating a legal structure to wrap the loan without having to do on sales clause get triggered.

You’re probably familiar with the due-on-sale clause. If your readers aren’t, it is if you sell the property or you switch title, it’s rare that they do this, but they have the ability technically to say, “You don’t own this anymore. You just changed title. We want to be paid in full.” A land sale contract, subject to, protects that a little bit more. I can’t say it wouldn’t, but it’s going to be more difficult for a bank to trigger that due-on-sales clause and say, “You owe me right now. Pay this off.”

That makes sense. What are some things that you wish that you knew first when you were starting looking for seller financing deals that you know now?

I thought about that a lot because I get asked that, like, “What would you have done differently? Would you have done anything differently?” I don’t know. I have mixed feelings. I have two lines of thought on it because there’s a part of me that’s like, “I should have done more deals and bigger deals at the same time.” The first deal gave me the confidence to do the next one, which gave me confidence to do the next one. The first seller-financed deal gave me the confidence to do the next one. The first mobile home park deal gave me the confidence to do the next one. I could go back and say I should have bought more or I should have bought bigger, but I bought everything that I possibly felt like I could at that time.

Part of it is that mindset of allowing your mind to think bigger because bigger deals I don’t think are any harder. In fact, in some ways, I’d say they’re easier. As you start moving into larger deals, you’re dealing with sellers that are investors themselves and dealing with banks that if you’re going to do a refi, you’re dealing with banks and understand investing more. A lot of people, it’s a mindset thing where it’s hard to get their mind past a single-family home or a lot of people get stuck on a duplex. They don’t believe that they can do or buy anything more than a duplex. That becomes a competitive market. A lot of people are looking for duplexes. If you’re dealing with sellers that are investors themselves, you focus on the relationship aspect of it. I know I’m only answering your question here, but the relationship part of it is most important because that’s where deals get made.

The reason I sold those properties to the couple that I did is we had built a relationship. It wasn’t some stranger asking me to carry finance with no money down. Even though I bought with no money down from people I don’t know, I focused on it being the relationship. How can I get to know them? I used to hand deliver my mortgage payment to this one woman, in particular, every single month just because I wanted to have that FaceTime. Who do you think she called when she wanted to sell her next property? She called me. We had that relationship. When I paid her off, when I refinanced this property in 2014, she said, “What am I going to do with that money? I had never borrowed private money.” I said, “You could lend it back to me.” She thought I was kidding.

A couple of months later, she was like, “I thought about it. Are you serious?” I was like, “Sure.” She financed the deal for me. She did that because we had six years of trust. We had six years of me making a mortgage payment to her on time. That relationship didn’t end because I paid her off and now it doesn’t exist. I focused on building a relationship with this woman not being transactional, like, “Thanks for making me money. Goodbye.” It was, “This was awesome. You benefited. I benefited. How can we help each other into the future?”

She didn’t even want to get paid off. You paid her off, but you still were able to turn it into another win-win situation for something that she wanted. I love that. You’ve mentioned the word relationship many times. What are some things that you do to build those relationships with people? Are you doing anything special?

I don’t know. I like and enjoy people. Some of the most amazing friendships that I’ve made are through GoBundance. You mentioned GoBundance at the beginning of the call. Outside of my family, a lot of the relationships that I have, have been built either directly or indirectly through GoBundance. Also, even jumping on podcasts. I’ve had people reach out to me. Sometimes it’s saying simple, “Thanks, I need to hear that.” Sometimes they’re showing me a deal or asking something. Other times, they become people that I enjoy pouring into because they’re out there doing that thing.

Ultimately, when I meet someone, I’m not trying to get anything from them. I might meet someone and it may become an acquaintance, but they might become a lifelong friend. Maybe we’ll do business together. I never go into it like, “What can I get from them? Can I somehow make money?” I try not to look at it as transactional. For me, it’s my nature. I enjoy people, having conversations with people, learning from people, and talking with people. It’s also not being afraid to put yourself out there. I realized early on that the first house I bought in 2005 was competitive. That first house I bought was off market. It was a friend of my realtor’s son. I’m staying in this house, knowing what the market price is and they’re agreeing to sell it to me for less. I’m like, “No one else knows this is for sale.”

The second house is because, in my mind, I decided I was an investor, I made a business card. I owned one home and rented out two of the rooms. I had a business card saying I’m an investor and gave it to a guy at the gym. That’s how I found my second house off market. If you don’t go out in there and tell people what you’re looking for, no one is going to bring you a deal. No one’s going to say, “Here’s this deal I have for you if they don’t know what you’re looking for.” Call on that developer out of the blue and say, “I admire your work. I’d love to know your story.” Ten years later, that led to a deal. My intention wasn’t like, “How do I get a deal from this guy?”

I wanted to know his story. I share this a lot, too, because it’s funny and my lender laughs about it. I walked into the hard money lender’s office, probably looking like a completely crazy person years before I ever asked to borrow hard money. I’m like, “My name’s Gabriel Hamel. I’m getting into real estate investing. We’ll probably do business together one day.” He’s shaking my hand, like, “Sure.” We stayed in touch. I borrowed millions of dollars. We built that relationship and then the track record. I didn’t go in there saying, “I’m buying a house tomorrow. I need money,” and they have no idea who I am. I take an organic holistic approach to it. It’s part of my life and what I do.

What I’m getting out of this is nobody could read your mind. Talking to people, start articulating and verbalizing what you’re looking for, people truly want to help other people. In your case, you build that relationship. They think of you and they want to help you out, too. You’re good at leaving a lasting impression and keeping that relationship going. That’s awesome. For asset classes, you’re invested in a good amount of them. Is there a main focus for asset class right now or are you looking at multiple things?

It shifted. It’s weird to say I let people know what you’re looking for. All those years, I was looking for small multifamily in this specific neighborhood. That’s what I would tell people. Those are the conversations I would have. That led to small multifamily in that area. In 2019, I shifted towards mobile home parks. I was like, “I’m looking for mobile home parks in this area,” and I ended up with mobile home parks in that area, so I’m telling everybody. I was focused on 2019, 2020, and 2021 in the mobile home park space. The first one was letting a broker know. They kept sending me apartments. I’m like, “I’m not interested. Here’s what I’m looking for.”

They got an in-house listing. I bought it. I told my property manager who manages a lot of my parks has brought me multiple deals. That’s been my focus. Now I’m shifting into more commercial properties. We’re going into an interesting unknown real estate market right now. I’m doing a few things. I refinanced four of my initial mobile home parks at the end of 2021 and early 2022. I felt like we were at the top of the market. Interest rates were still low. I’d like to say I timed that perfectly. It was a gut feeling of interest rates are low and prices are high. It’s a good time to refi.

I’m looking for opportunities. I closed earlier in 2022 in five industrial complexes. Again, as I said before, the fundamentals of investing don’t change. I’m looking at a strong cash-on-cash return. On the commercial sub, I want a strong tenant. The numbers have to make sense. I’ll buy in the up market, down market, and sideways market, as long as the financials make sense. I personally think one of the best ways to hedge your risk, as I was talking about this on a call, is owning more real estate. It’s the whole analogy of if you have a single-family home and they move out, 100% of your income is gone. If you have four units and one moves out, you still have 3/4 of your income.

I have those industrial complexes and it’s my largest purchase. I should buy more bigger deals that cashflow more long-term. Say I have ten big commercial properties and one of those goes vacant. That’s a lot of income. I have nine other commercial properties that are kicking off that income that hedges my risk while I’m building assets and acquiring more cash-producing assets. It’s a shift for me. I’ve done some private money lending in 2022. Ultimately, that’s in the interim as I’m looking to buy more assets.

It’s a great way to stay diversified which is what you were saying.

That was a long answer to your question.

That’s totally cool. You’re doing a lot. I’m curious do you have a big team or staff who have been helping you or do you work with a ton of business partners? You’re doing a lot of this with other people. What does your team look like or the people that are helping you?

You might be surprised. I bought an RV park earlier in 2022. It’s separate from a long-term tenant at mobile home parks. I hired my first W-2 employee to run that park. He’s full-time at that park. An ass-kicker of a manager. The guy is amazing. He runs that. The RV park is more of a business than real estate. It’s operational. That guy is there full-time and lives on-site. He is phenomenal. Outside of that, I don’t have employees. I rely heavily on my property managers. I don’t own a property management company. I am not a licensed agent or broker. The thing that’s allowed me to own my time is I focus on the big picture stuff.

Real Estate: Just believe you get deals, and then the right people will show up at the right time. It just happens.

I don’t spend hours working. I don’t cram my day. Usually, if I’m working on something, it’s a new deal or something within the business, but we’re talking a couple of hours a week. My third-party property managers are probably the strongest part of my team. I have a lot of agents and brokers that know what I’m looking for that send me deals. A lot of it is deal flow. Property management is what allows me to own my time more than anything.

I’m glad I asked the question. That wasn’t the answer I was even expecting to hear, to be honest with you. You have good control of your time. They always say simple is better, but you kept it so simple.

I was clear on what I wanted the real estate to do for me. It was that realization that I wanted my time freedom and I didn’t want to build something that would take away so much of my time that I wasn’t able to enjoy life, able to travel, hang out with my family, or do the things that I want. It was about the freedom to do what I want to do. I’ve watched people that want out of their W-2. Maybe you got to grind for a while, but there is this grind mentality in our society where working more, you’re going to get more. That’s not always the case. A lot of times, working more is going to take you away from why you got into investing in the first place.

I’ve watched people, even some of our friends in GoBundance, they got into real estate investment because they wanted more time to do whatever it was, whether it was with family or to travel. They built themselves into a corner where they’re like, “I went from working 40 hours a week to 100 hours a week.” They hate it when they won’t remove themselves from the business. I’ve been cautious about what am I good at. I’m not good at property management. I don’t want to run this big team. I don’t want to be responsible for a whole bunch of people, but I can hire third-party property management that does a better job managing than me, let them do what they’re good at, and still have my time.

I considered opening a property management company. I’m like, “No, that doesn’t align with the things that are important to me.” I considered getting my license to open a brokerage. I’m like, “It doesn’t align with what I want in my life. Even if it made me twice the amount of money, I don’t want to put the time and effort into that.” My best use of time is probably thinking and then putting deals together. Outside of that, it’s my health, my time with my family, time to travel, and the time to do whatever the hell I want.

You’re clear on what you want. It’s inspiring to me. Speaking of what you’re good at, do you have a main superpower? What do you say if somebody asked you that question? What is your main superpower?

I haven’t asked that before. I don’t know. My superpower or something I’m good at is I will make something happen if I want it bad enough. I truly believe if we want something bad enough, we’ll find a way. In some ways, I would convince myself in my mind that something is possible and that will happen and manifest that and it happens whether it was building a multimillion-dollar real estate portfolio. I was telling people that when I was living in my friend’s attic for $100 a month and they’re like, “You’re crazy. How are you going to build this real estate? You live in an attic like Quasimoto. What are you talking about?”

I’m like, “I don’t know how, but I will.” That RV park, I closed on that. I’d mentioned having this amazing employee. I bought that without someone lined up to run it. I had never hired an employee. I knew I needed someone. I asked the previous owners if they could stay on for a little bit, but I knew in my mind I need to buy that property. The numbers look good. I have this guy drive 400 miles to meet me. He has a background in doing this all over the country previously. He’s like, “I want to live here.” He drives 5 hours after driving 400 miles to meet me and goes and stays at the park. It’s a Law of Attraction. You believe it would happen and then the right people show up at the right time. It happens.

How did you find this guy? Did you post on the internet?

I had never hired someone. I relied on third-party property managers. I put a thing on Indeed and some other thing. It was some crazy calls. In the RV industry, you get a lot of traveling folks. I wanted someone there full-time. I get this call from this guy and he’s like, “I used to do this for a couple all over the country. They would buy places that were running okay. I would go and make these run better. I want to be in one place. This is over in Eastern Oregon.”

I don’t want to run an RV park in Eastern Oregon. He loves it. He doesn’t want to be anywhere else. He wants to be there forever and do this. I knew as soon as he drove 400 miles to meet me that he had the background. He also had grit. He’s ridiculous. He sent me a picture of the office and then he sends me a picture and was like, “Look what I did today.” The entire exterior is painted. I didn’t ask him to do that, but he did that because a lot of the bookings have been automated. He’s like, “I made this space 12 feet bigger.” He’s way better at it than I would be. That’s his experience. I let him do what he’s good at. I let my property managers do what they are good at, and then I focus on the big-picture stuff.

He’s doing all the thinking for you, things that you didn’t even think about above and beyond. Any big goals that you’re working on for the next twelve months or so, personal or business?

There are certain areas where I’m pretty goal oriented. I try to look at the big picture. Sometimes with goals, I don’t like creating things. I like to implement more practices. There are things that I do that I keep doing, working out, jumping on podcasts, jumping on some of the GoBundance calls, and stuff. That’s important to me. It keeps my mind active. I want to build a $100 million portfolio over the next couple of years. If I hit that, great. If I decide to go bigger, great. The biggest thing is I enjoy the real estate game. Sometimes people ask like, “When is the stopping point? When is enough, enough?” This is part of me. Unless I stop enjoying it, I’m going to keep doing it. I like the game of it.

This might be a hard question for you, but if you weren’t doing real estate, what the heck do you think you’d be doing?

I love to travel. I’ve got to go to some neat places over the last couple of years. I like to see the world, support my kids and what they’re doing, and see more. Every time I go somewhere amazing, I’m like, “There are many more other parts of the world that I haven’t seen.” Even on that two-month road trip we talked about, I had no interest in doing that. I was like, “I want to go travel internationally.” My wife was like, “No, I want to do this. Let’s go do this.” It’s one of the most amazing things we’ve done.

The more things I do and the more things I see, I realize there are even more things to see. Traveling is important, time with the family and then working out. I don’t cram my day with stuff, but I put things in my life that add value. I love the mastermind calls that I’m on. I love jumping on podcasts and talking about this stuff. To me, it’s one of the most rewarding things there. When people reach out and say, “I did my first seller-financed deal.” I had someone tell me they quit their W-2 job at Amazon. They reached out to me a few years ago after the BiggerPockets podcast that I was on, but they stayed in touch.

I love pouring back into those that are doing it. It’s not like I’m sitting around watching TV all day and doing nothing. I find things to put in my life that continually enrich my life. Sometimes it is like, “What do I need to do to step up in this area of my life and in all areas of my life?” It’s not like I’m sitting around doing nothing.

Last question, how can somebody get ahold of you?

The best way is Instagram, @GabrielRHamel. I’m fairly active on Instagram.

That’s a wrap, guys. Thanks, Gabe, for joining me on this episode. Thanks for sharing your story and your overall real estate journey. You live a life by design that many people envy, especially all that time freedom you have. You built that and you deserve that. Even I’m trying to emulate some of what you got going on in my life. Thanks for being authentic and showing that it can be done. I’m looking forward to seeing your own growth. I know I’m going to see you at future Spartan Race in GoBundance events. I’m looking forward to that. To my readers, feel free to reach out to Gabe if you have any questions for him. Also, thanks for checking out this episode. Until next time, live life abundantly. Thanks all. Thanks, Gabe.

Important Links

• Gabriel Hamel
• Rich Dad Poor Dad
• GoBundance
• @GabrielRHamel – Instagram

About Gabriel Hamel

My name is Gabriel Hamel and I live in Eugene Oregon with my wife and 2 boys. I prioritize a few important things in my life, family being #1, followed by my heath, my happiness, and building wealth through real estate.

In 2005 at 23 years old, a year after returning home from the Iraq War with the United State Army, I purchased my first single family property. I purchased another property in 2006 and another in 2007. I spent 2009-2019 investing in small and medium sized multi-family properties, mixed-use commercial buildings and Mobile Home Parks. I currently hold a $40M+ real estate portfolio consisting of roughly 400 multifamily, mixed-use, and Mobile Home Park, and Commercial units. More can be seen at http://www.hamelinvestments.com.